"Affordable housing is now attracting the interest of more developers who had previously shunned it because of its down-market image. Today, it has become a respectable segment and with the government's determined push... it now plays a very important role in the housing finance sector," Anuj Puri, Residential Chairman of property consulting firm Jones Lang LaSalle, told IANS.

LIC Housing Finance BSE -0.28 %  said it has identified affordable housing as the focus area for the current year and has devised strategies and action plans for greater emphasis on the sector.

Shankara Vaddadi, CEO and Founder of online peer-to-peer lending platform I-lend, told IANS, "With quick turnaround times, this sector is ripe for a new breed of housing finance companies to enter with much lower thresholds and quicker movement on disbursal. This will lead to competition.. we can see a new breed of non-banking financial companies (NBFCs) getting into the sector and making quick inroads."

According to a report by domestic ratings agency Crisil, affordable homes are altering mortgage market dynamics. It estimates that the segment was worth around Rs 1.6 lakh crore as on March 31, 2017 -- accounting for over 25 per cent of all housing loans.

Affordable housing has the potential to be clean and quick, leading to lower operational and marketing costs and helping in creating a new category within the realty space.

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Many construction materials are in the 18 and 28 per cent GST slabs. For example, steel and steel products are at 18 per cent and cement is at 28 per cent. Currently, the total tax burden is calculated at 30 to 31 per cent, which is 2-3 percent more than the proposed GST rate for cement. Also, as an input tax credit is available, the overall tax incidence should be neutralised.

"Thus, the basic construction cost may come down a little, but as the input tax credit is limited to 12 per cent, there may not be much saving in the high-end specification construction," Surabhi Arora, Senior Associate Director, Research, Colliers International India, said.

"The question for the buyer will remain whether the developer will pass the saving in the form of price correction or not, despite the anti-profiteering clause because it may be difficult to monitor in real time," Arora said.

Moreover, infrastructure status to the affordable housing segment and Real Estate Regulation and Development Act, 2016 (RERA) are considered crucial moves for its growth.